RANCHO PALOS VERDES — Over the years, a short stretch of Palos Verdes Drive South has offered enough thrills to rival any roller coaster.

"Before we fixed it this last time, it was like driving into a basement and coming out again," Mayor John C. McTaggart said. "It was quite an experience to come driving out of there at dusk and see nothing but sky in front of you."

The tiny stretch of road McTaggart and others have come to curse lies within the Portuguese Bend landslide area. Only eight-tenths of a mile long, it provides a pristine, panoramic view of the Pacific Ocean savored by sightseers, joggers and bicyclists.

The problem, city officials say, is that the asphalt, like the road below it, moves. Not just occasionally, but daily and by inches as it bubbles up and down and sinks and slides toward the water's edge. The result has been a costly, never-ending repair job for the city and, no matter what work is done, a rousing ride for drivers.

Surprised by Road

"The first time my wife and I made a trip over it prior to buying our house, we said there can't possibly be a road this bad in Southern California," said Bill Haithcock, an investment counselor who lives about a mile from the bulging blacktop. "We thought there must have been an earthquake or something."

The road is a constant reminder of the devastation caused by the 270-acre slide, the fastest-moving of three slides within the city. Since the Portuguese Bend slide began in 1956, 128 homes have been destroyed and countless others damaged as the earth in some areas has moved more than 600 feet.

Moreover, the large sums required to continually repair the road have become a rallying cry for city officials in their efforts to obtain state aid to stabilize the slide. Under a bill sponsored by Assemblyman Gerald N. Felando (R-San Pedro) and pending before the state Legislature, the city would receive a $2-million loan to help pay for work in the area. The assemblyman had fought for a $6-million grant for the city.

City officials say that if Rancho Palos Verdes receives the loan, it will be used to help pay for more wells to pump out water that has seeped into geological formations. Since 1984, the city has constructed four wells and is building five more. It also plans to construct other drainage facilities throughout the slide area.

Repairs Costly

But until the work is completed and proven a success, the city has to keep repairing the road, a job it has paid dearly for since Rancho Palos Verdes was incorporated in 1973 and Los Angeles County, which was forced to rebuilt the stretch of road twice, relinquished its responsibility to maintain it.

It is a task the city says is not only necessary--Palos Verdes Drive South is the only street that connects the east and west sides of the town--but one that has become increasingly expensive as the slide has accelerated in recent years because of heavy rains in the late '70s and early '80s.

Charles H. Abbott, the city's public works director, estimates that Rancho Palos Verdes has spent $1.5 million to repair the road during the last 12 years. In the past two years, more than $390,000 has been used to repair and reconstruct it. By comparison, the city spent an average of $6,800 per mile to maintain all its other streets during the same period.

For fiscal year 1985-86, the city has budgeted $150,000 to repair the road, an amount that McTaggart said is three times what the city's founders--aware that the small stretch of road would be a constant drain on the city's treasury--estimated they would probably be forced to spend to maintain it.

"We have about 136 miles of road in the city, and this stretch is less than one mile," Abbott said. "So we're spending more than 25% of our road maintenance money on less than 1% of our streets."

Deteriorates Quickly

Just how quickly the road deteriorates, Abbott and others said, is evident in the land movement that has occurred along the roadway since it was rebuilt by the city only last winter. The job was undertaken after the road had become so bad that the Southern California Rapid Transit District, fearing that the deep dips could damage the gas tanks attached to the bellies of its buses, stopped service along the stretch. Transit riders were forced to use a local bus service from January until the new road was dedicated by city officials.

Abbott said the new roadway, completed in February, was built about 150 to 200 feet north of where the previous road was constructed in 1981. "That is where we put it in February, but it has all changed now," he said. "The movement out there has been more than an inch a day. In some places it has moved more than three feet a month."

Abbott added that geologic conditions in the area change so fast that the city was unable to draw up engineering plans before it began the rebuilding job. "We just went out and graded and did the best we could."

The land movement along the stretch of road does not go unnoticed by motorists who travel the road frequently.